Thursday, May 25, 2006

Good Economics News

Larry Kudlow says the economy is in good shape. Growth is at 3.5 percent which isn't amazing but is steady. And steady is a good thing.
Economic pundits keep telling us about the impending slowdown. Well, they’ve been waiting for a slowdown for years. Actually, I’ve heard about this slowdown for 25 years, ever since Reagan restructured and revived American capitalism through low tax rates, deregulation, and disinflation.
I'm sure there will be an economic slowdown. I'm also sure that gravity will pull every object I throw into the air back to earth. Eventually the economy will need to rebalance and adjust to changing conditions. Predicting the downfall of the economy is great because eventually you get to be right.

But I have no idea when it will happen. Neither do most of these pundits. I'm betting a decline in some sectors, like real estate will happen sooner rather than later. With interest rates going up, the real estate market is going to have a shakeup. I'm also wondering about energy costs, but I don't know enough about that market yet. I'm betting more production is going to move stateside because US citizens are getting hit in the wallet by what is happening overseas.

Other than that, the economy is good and I can't complain.

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